NB Power deal forced $86K in retention fees

The New Brunswick System Operator paid $86,000 in retention fees to three employees so they would not leave the organization after the deal to sell NB Power was announced.

Under the original memorandum of understanding between the New Brunswick and Quebec governments in October 2009, the system operator (NBSO) was to be rolled back into NB Power.

The NBSO, an independent body that oversees the security and reliability of the province's transmission system, was supposed to continue operating until April 1 when the power deal was to be finalized, but the organization worried that it could lose three of its top executives if it didn't offer the special payments.

The NBSO's board of directors, according to documents filed with the Energy and Utilities Board, approved $86,000 in retention payments.

Curtis Howe, the NBSO chairman, said the three employees are highly specialized and it would have been extremely difficult to replace them, had they left early, and to maintain the organization's daily functions.

"[The board determined] this could potentially be a serious problem if we do lose these folks. So we thought it was a significant risk," Howe said in an interview.

The three executives that received the payments were Sylvain Gignac, the president and chief executive officer, Jean Finn, the vice-president of planning and operations and George Porter, the director of market development and settlement.

The system operator is funded entirely through transmission tariffs that are paid by companies, such as NB Power Transmission Co., that wheel power across the province's grid.

The board approved that the executives would receive retention fees equivalent of five months pay.

Payments retained

The plan to fold the NBSO back into NB Power died in January when the New Brunswick and Quebec governments renegotiated a scaled back version of the power deal.

When it was determined that the system operator would not be disbanded, there was no longer anyreason for the retention fees.

Howe said it was NBSO's president who came forward to the board and offered to have the retention payments cancelled when it became evident the NBSO would survive.

"The retention arrangement was set up and communicated shortly after the original MOU was made public [on Oct. 27]. So we had put this in place and when the second MOU was announced [on Jan. 24] the CEO came to our board and said, 'Things have changed, we are willing to forgo the retention arrangement,'" Howe said.

"And the board said, 'You've shown good faith. We will meet you part way.' Instead of eliminating theretention arrangement, we reduced the retention payments."

The board rolled back the retention fees for the president and vice-president to one month's pay, according to EUB documents.

The NBSO said the three recipients of the retention fees are still with the organization and are expected to remain there throughout this fiscal year.